[RPPTL LandTen] Landlord Mandated Insurance

Thu Oct 24 15:31:19 PDT 2019

The additional interest is certainly allowed as all it is would be
notification of a lapse.  "Additional interest" and "additional insured" are
very different,

I have many of the same questions as Mike.

Interestingly, please see the bill that was introduced in 2014 but never
went anywhere which almost makes it an "assumption" that renters insurance
can be mandated.

At the time, there were 3 states that specifically stated that renters
insurance could be required but Florida law has always been silent on this.

I have this nagging question as to whether the landlord can require renter's
insurance that has the liability coverage in it for damage to the owner's
property, like fires or floods, or if it is limited to the more basic
policies which only cover the tenant's personal property. 

Some managers are including renters insurance in the rent amount and buying
this insurance on behalf of the tenant.  

In the mortgage world, if there is a lapse in insurance, the bank can pay
for the insurance and charge the homeowner.

Please see the attached that many managers use where I never felt
comfortable saying it was legal or not. 

Harry

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From: landten-bounces at lists.flabarrpptl.org
[mailto:landten-bounces at lists.flabarrpptl.org] On Behalf Of Mike Davis
Sent: Thursday, October 24, 2019 6:12 PM
To: 'landten at lists.flabarrpptl.org'
Subject: [RPPTL LandTen] Landlord Mandated Insurance

All

I am interested in fellow listserv members' input on landlord mandated
insurance.  I can't find anything in Hauser or any cases directly on point
that speak to insurance, insurance charges, or having the landlord listed as
the "additional interest or interested party" in the insurance.  Further, I
also couldn't find anything (or am looking in the wrong places) regarding
the issues of the landlord potentially falling into becoming an insurer or
selling insurance. 

I think the key issues that I have seen on landlord mandated insurance lease
provisions are: (Assume the facts below are supported by appropriate lease
provisions.)

1)      Can the landlord require a tenant have liability insurance in a
minimum amount?  If so, can the landlord require that the landlord be listed
as an additional interest (to be notified if the insurance lapses)?  

2)      If the tenant does not have the required insurance, can the landlord
force place the required insurance on behalf of the tenant and pass-through
the premium charges to the tenant (as "additional rent")?  Assume the
landlord is charging the tenant only its actual costs of the insurance.  I
don't want to get into the quagmire of the landlord making a profit from the
insurance.  That seems to me to be a clear-cut case of landlord selling
insurance which I believe requires a license.

3)      If the tenant does not have the required insurance, can the landlord
charge a "penalty" (as "additional rent') while the tenant is in
non-compliance with the requirement? 

1.	My thoughts are there aren't any residential landlord/tenant
statutes or case law on insurance.  Therefore, absent applicable laws in
insurance regulation, the landlord can require it.  Since the landlord can
require it, the landlord can require reasonable conditions, such as
additional insured to be informed of policy lapse.  I have a concern that a
court may find that requiring renter's property insurance to cover the
tenant's property would be seen as a benefit to the tenant.  Requiring
renter's liability insurance may be seen as less for the tenant and more for
the benefit of the owner.  But a lot of lease provisions are for the
landlord's benefit.  I also think that, if the landlord does require
liability insurance, the landlord should not require a specific company to
avoid allegations of "directing" or "collusion". 
2.	A "forced placement" doesn't seem to be a "penalty" as the tenant is
getting a benefit.  It can be argued that this is the landlord remedying
(after notice to the tenant) akin to the landlord remedying in other rental
situation.  Single family home rentals, tenant responsible for lawn, pool or
spa care, 7Cure with warning that if not remedied landlord will remedy at
tenant's expense to avoid damage to lawn, pool or spa.  Multifamily rentals,
the only thing that came to mind was tenant responsible utilities (electric
or water), 7Cure with warning that if not remedied (turned on) landlord will
remedy at tenant's expense by putting in landlord's name to avoid damage
(mold, dead lawn).
3.	In general I think that penalties in L/T cases are disfavored by the
courts.  Rather than a penalty, the appropriate landlord response should be
to follow the seven-day process or possibly to self-remedy with forced
placement.

Mike

Michael Geo. F. Davis

Attorney at Law

The MGFD Law Firm PA

Countryside Colonial Center

2753 SR 580, Suite 209

Clearwater, FL 33761-3351

P 727-726-1900

F 727-726-7440

mike at mgfdlaw.com

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